Global | Publication | May 2024
In March 2024, Saudi Arabia hosted the inaugural Riyadh International Disputes Week. Among other issues in discussion was the rise of mediation as a means of dispute resolution across the Middle East region. Mediation is a common form of alternative dispute resolution in many jurisdictions. It allows parties to explore settlement options that a court cannot otherwise grant and offers the potential to save both time and money. Mediation has the added benefit of allowing the parties to preserve a relationship. However, as was highlighted at Riyadh International Disputes Week, mediation has traditionally been less common in disputes in the Middle East. Why is this?
Cultural understandings and a lack of procedural mechanisms to foster mediation in local proceedings have generally resulted in parties in the region being uncomfortable mediating their disputes. A key driver of this has been the question of whether mediation discussions are confidential. However, in many jurisdictions, mediations have traditionally been conducted on a “without prejudice” basis, meaning that what is said in the mediation cannot be relied upon in litigious proceedings. This concept has not generally been applicable in the Middle East, and parties have been reluctant to engage in mediation, fearing that concessions made in the mediation could prejudice their position in any formal proceedings.
However, there is reason to believe this culture is changing. Recently, a number of jurisdictions and institutions in the Middle East have taken steps to introduce formalised mediation frameworks which we anticipate will result in a rise in mediation across the region. Other recent developments also hint to a continuation of this trend.
The increasing popularity of mediation in the Middle East may stem from the signing of the United Nations Convention on International Settlement Agreements Resulting from Mediation (the Singapore Convention) in 2020. The Singapore Convention seeks to promote mediation as a method of alternative dispute resolution and creates a framework for the resolution of disputes through mediation. In particular, the Singapore Convention seeks to ensure that agreements to mediate are enforceable (and will be enforced in domestic courts) in signatory states. In this way, it is similar to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (more common referred to as the New York Convention), which seeks to ensure the enforceability of agreements to arbitrate.
Qatar and Saudi Arabia were founding signatories of the Singapore Convention and in 2022, the UAE announced that it would also become a signatory (though it has yet to do so). Jordan, Iran and Afghanistan have also signed the Singapore Convention, but are yet to ratify through the passing of local laws. As the Singapore Convention gathers more signatories, we anticipate that more jurisdictions across the Middle East will take steps to develop their mediation frameworks.
Qatar, the UAE and Saudi Arabia have recently passed laws which make mediation a more attractive means of resolving a dispute.
Qatar
In November 2021, Qatar issued its Mediation Law, which applies to all mediations taking place in Qatar, except where the parties agree otherwise, or where parties agree to apply the Mediation Law to their dispute. The Qatar Mediation Law also allows courts to request parties to mediate their disputes; though a request to mediate on this basis is not compulsory.
Importantly, the Qatar Mediation Law imposes strict obligations of confidentiality upon the parties and the mediator, prohibiting the disclosure of all discussions, documents or offers and imposes fines if those obligations are breached.
UAE
The UAE issued its Mediation Law in April 2021, and, like Qatar’s, the UAE’s Mediation Law allows UAE onshore courts (i.e. those outside of freezones) to refer a dispute to mediation, though such referral will only be effective if the parties consent to mediation.
The most important change for facilitating productive mediations is the codification of the confidentiality of mediations themselves. In line with best practice, the UAE Mediation Law requires that the content and conduct of mediations should be kept confidential. The law prescribes that parties cannot rely on any documents or concessions made in the mediation before courts. Deviations from these confidentiality obligations may only be made with the consent of both parties.
In conjunction with the UAE Mediation Law, the UAE government has also established an “eMediation” platform called “Wasata” to allow parties to facilitate effective mediations.
Saudi Arabia
In 2023, Saudi Arabia issued a draft mediation law which follows many of the best practice features which have been adopted by the UAE and Qatar. Importantly, the draft law requires mediation proceedings to be kept confidential. The law has not yet come into force but is expected to do so imminently, as Saudi believes it will improve the “Kingdom’s business environment and investment attractiveness”.
Virtual mediation in Abu Dhabi
The Abu Dhabi Global Market (ADGM) is an English common law freezone in Abu Dhabi. In late 2022, it launched a virtual mediation service which seeks to facilitate mediation and reduce the need for parties to meet in person to mediate their disputes.
This service has been supplemented by the recently launched “ODR@ADGM”, a secure and confidential digital platform that is intended to allow parties to a dispute to engage proactively in negotiations. The platform is a portal which will guide parties through a series of questions that will result in a tailored settlement offer. This settlement offer will be sent to the other party, who can then engage with the settlement offer on the platform.
ODR@ADGM is intended to be a flexible means of allowing parties to engage with one another, with deadlines that can be tailored to the particular dispute.
The DIAC Mediation Rules
On 1 October 2023, Dubai International Arbitration Centre (DIAC) issued its 2023 Mediation Rules, which are a welcome addition to DIAC’s role as Dubai’s premier arbitration institution.
The 2023 Mediation Rules emphasise the consensual nature of mediation and allow any party to withdraw at any stage of the process. In line with international best practice, the 2023 Mediation Rules require any mediator to be independent of the parties, to maintain its independence, and to disclose conflicts of interest. The 2023 Mediation Rules afford the mediator and the parties broad discretion as to how the mediation should be conducted. Finally, the 2023 Mediation Rules require that all information related to the mediation should remain confidential, as should any settlement agreement. Importantly, the 2023 Mediation Rules prohibit a party from relying on statements made during the mediation in any judicial or arbitral proceedings.
This last provision is a positive inclusion as it helps to clarify the scope of the confidentiality obligations that adhere to mediations conducted before DIAC. This prohibition should encourage parties to view mediation as a constructive way to resolve their disputes better, without fear of prejudicing their formal positions in litigation.
OAC’s 2021 Mediation Rules
Though less recent, it is also worth highlighting that in 2021 the Oman Commercial Arbitration Centre (the OAC) issued its Mediation Rules. Like the other mediation rules highlighted above, the OAC Mediation Rules provide a structure for parties seeking to mediate their disputes. Similar to other rules, they emphasise the confidentiality of the mediation process, and are a welcome addition to the region’s dispute resolution landscape.
Countries and institutions throughout the Middle East are updating their laws and rules to encourage mediation as a means of dispute resolution. These updates provide structure to the mediation process and emphasise the confidentiality of mediations. These changes will help to foster an environment where the parties can be candid with one another and resolve their disputes quickly and cheaply.
As the Singapore Convention gains signatories, and more countries in the Middle East ratify the Convention, we expect to see an increasing number of countries pass pro-mediation reforms, which will make mediation an increasingly attractive option to parties in the region.
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